It's the weekly commodity edition of What the FICC?

The wheat complex looks interesting at current levels, offering trading opportunities in either direction.

Check it out!

From the Desk of Ian Culley @IanCulley

Last week I covered the soybean complex and corn.

As promised, I’ll cover the wheat complex this week, rounding out our coverage of the grain markets.

Let’s dive in!

Before we start, check out this breakdown of the different types of wheat varieties. I love to nerd out on this stuff – anything that involves maps, I’m hooked!

Today I’ll cover the most actively traded US contracts; Chicago Soft Red Winter Wheat (SRW), Kansas City Hard Red Winter Wheat (HRW), and Minneapolis Hard Red Spring Wheat (HRS).

The first two contracts trade on the Chicago Board of Trade (CBOT), with soft red wheat first trading on the CBOT in 1877. Minneapolis spring wheat trades on the Minneapolis Grain Exchange (MGEX).

These different types of wheat derive their names from their growing regions, where they initially come to market, and even their protein levels (hard = higher protein, soft = lower protein).

There’s plenty of information on the...

It's the weekly commodity edition of What the FICC?

Coffee, cocoa, and OJ are all ripping higher.

So can we extend an underlying bullish thesis for ag commodities to the grain contracts traded on the CBOT?

I don’t think it’s that simple. Regardless, I want to be prepared if and when the Chicago grain markets break out…

From the Desk of Ian Culley @IanCulley

I can’t stop talking about the softs trading on the NYMEX.

Coffee, cocoa, and OJ are all ripping higher. It seems only a matter of time before sugar and cotton join the fun.  

So can we extend an underlying bullish thesis for ag commodities to the grain contracts traded on the CBOT?

I don’t think it’s that simple. Regardless, I want to be prepared if and when the Chicago grain markets break out…

Let’s review the most actively traded contracts for corn and the soybean complex. First up…

Corn

Here’s the May corn futures contract:

There are two ways to play it.

You could buy strength above 684, targeting 765. Or you could sell weakness on a break below 639, targeting 575.

Both work. It just depends on the next directional move.

“Hey, Ian, it seems like you’re cruising for a bruising at these...

It's the weekly commodity edition of What the FICC?

If you missed last month's breakout in Sugar, have no fear: It's offering us another opportunity to get long.…

Check it out!

From the Desk of Ian Culley @IanCulley

The New York Mercantile Exchange soft commodity contracts have been ripping.

Orange juice futures recently broke out of a decade-long base, coffee is up almost 20% in a month, and cocoa hit fresh 52-week highs yesterday.

Yet, of all the softs, I like sugar the most.

In fact, sugar held the No. 1 spot as my favorite chart heading into 2023. And it broke out last month!

I missed that move -- not for lack of initiative, more like access issues.

If you missed it, too, have no fear: Sugar is offering us another opportunity to get long.…

Check out the weekly chart:

Sugar futures broke out of a multi-year base in early 2021, climbing more than 30% over the following eight months. Since then it's consolidated within a tight range.

I can’t resist taking a shot at a continuation pattern following a big...

It's the weekly commodity edition of What the FICC?

I want to share with you a trade idea I wouldn’t have considered a year ago...

Check it out!

From the Desk of Ian Culley @IanCulley

I want to share with you a trade idea I wouldn’t have considered a year ago.

I balked at first. This trade’s simply not in my wheelhouse. But I’ve learned so much here at All Star Charts over the past three years.

And "to be open-minded" has been one of the most impactful lessons. 

Now, this setup has my full attention. Risk is well-defined, and the upside potential is heavily skewed in our favor.

I can see the spin on the pitch.

I’m talking about natural gas…

Before I lay out the levels, let’s step back and look at the big picture.

Natural gas stocks, represented by the Natural Gas ETF $FCG, haven't experienced the same extreme sell-off as natural gas futures $NGF:

In fact, they’re hanging tough much like other energy stocks. We’ve seen this before with crude oil and the Energy Sector ETF $XLE in recent quarters. 

So far, crude oil is carving out a base while XLE continues its...

It's the weekly commodity edition of What the FICC?

Since I've been under the weather this week, I wanted to share three of my favorite charts from the entire FICC space heading into the weekend.

Check it out!

From the Desk of Ian Culley @IanCulley

Forget about what Powell said or whatever you heard on the street. 

We’re still looking for risk assets to buy.

That includes stocks and commodities. Despite the dollar applying downside pressure to risk assets this morning, I want to share one commodity that looks ready to rip…

Check out the weekly chart of Cotton futures:

Cotton experienced a sharp decline last year following an impressive run-up off the 2020 lows. Fast forward to today, and it’s challenging a critical retracement level from below at approximately 89.

The bulls have hammered this level since October of last year. And the way I learned it… 

The more times a level is tested, the higher the likelihood it breaks.

I want to catch a breakout in cotton above 88.30 in the March contract with an upside objective of 114.50 (Note: cotton is set to roll to the May contract based on volume next...

It's the weekly commodity edition of What the FICC?

I have to imagine Uranium stocks catch a bid if copper and gold are ripping higher.

Check it out!

From the Desk of Ian Culley @IanCulley

Commodity prices remain elevated despite easing inflationary pressures.

It’s evident in the two overarching themes across the commodity space – resilience at the index level and relative strength from metals.

I’ve been vocal about both, urging readers not to fight DR. Copper while teasing the possibility of Gold reaching 5K. I’m serious about both!

Strength likely spills over into the periphery if we’re in an environment where gold and copper print fresh highs. 

That brings us to my favorite chart this week…

Check out the Uranium ETF $URA:

URA completed a multi-year base in April 2021. It has since found support at a former resistance level marked by its prior cycle highs from 2017. 

I’m sure...